Advantages & Disadvantages of a Sole Proprietorship

An excerpt from the Freelance Writer’s Toolkit.

A sole proprietorship is the easiest form of business to start, as there are virtually no legal formalities to complete. In a sole proprietorship the business has only one owner.

The business also does not have a legal identity distinct from the owner, and is therefore considered a personal wealth investment. The owners of a sole proprietorship only have to answer to themselves, but the business will cease to be a legal entity if the owner dies or sells the business.

A sole proprietorship has the ability to borrow funds, but that borrowing status is dependent on the owner’s personal financial status. The owners are personally liable for any defaults or lawsuits, and their personal property can be taken away in the event of a lawsuit.

Profits from a sole proprietorship are not taxed–they are considered as income on the owner’s personal taxes.

Order the Freelance Writer’s Toolkit for more help with starting and running a successful business.

Next: Finding Your Niche: Writing Corporate Histories

About Karen Y. Hamilton

Walt Whitman says about his autobiography, Specimen Days “…At any rate I obey my happy hour’s command, which seems curiously imperative. May-be, if don’t do anything else, I shall send out the most wayward, spontaneous, fragmentary book ever printed.” This is what I feel at this juncture of my life, the need to gather together memories of my ancestors as well as my own memories into some semblance of order. Because all of those fragments, all of the fragments that make up any life, become stories. I am the mother of three sons, who affectionately (I hope!) call me 'gypsy mom' because I tend to wander around a bit soaking in the universe's wonders. I am currently working towards an MFA in Creative Writing at Florida Atlantic University. I have published essays with Heritage Press, Florida Living, and the St. Pauls Review. I am currently working on a book of poems about the Florida Everglades pioneers and a memoir about grief and the bonds of friendship. I live in my hometown, Jupiter, Florida and work as a freelance writer and curriculum specialist.
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2 Responses to Advantages & Disadvantages of a Sole Proprietorship

  1. Pingback: Making a Business Plan « Karenzo Media

  2. I ran my little doctor practice alone for years. I was the first one there and the last one to leave, but nobody ever fired me.

    Dr. B

    drtombibey.wordpress.com

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